Not His Fault

http://www.nytimes.com/2003/09/11/business/new-agency-proposed-to-oversee-freddie-mac-and-fannie-mae.html?pagewanted=2

'The regulator has not only been outmanned, it has been out-lobbied,'' said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal and who leads a subcommittee that oversees the companies. ''Being underfunded does not explain how a glowing report of Freddie's operations was released only hours before the managerial upheaval that followed. This is not world-class regulatory work.''

Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who
fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services
Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Perhaps you know this last quoted official - this is him from Sept. 2003 staving off Federal oversight for his boyfriend.

I see an awful lot of blaming everyone and everything but banks, mortgage companies, etc. for predatory lending. Some of the issue I am sure were exasperated by those things, but lending institutions were a part of the problem as well as people living beyond their means. Why do I see a tendency here to never blame big business for anything? Do you believe predatory lending exists?

http://www.responsiblelending.org Take a look under the 8 signs of predatory lending. There are many sites and articles dedicated to this subject.

Oh and Aaron. I don't jump because you say to 'Scooter'.

Andrea, why can't you just acknowledge that the very people who are supposed to protect us were instead more concerned with their own personal wealth and power and than of their friends than what was best for average Americans and our financial systms?

Why can't you just think of what these people have done to bring about this chaos? Could it be because you want them to now take over our health care system? What kind of havoc do you think they will play with that?

No doubt there are predatory lenders out there, but Barney Frank and Maxine Waters couldn't care less. They only want what's in it for them and theirs as they have shown time, and time again. Why should we expect they'd treat our health any differently then they've been treating our finances? Should we expect they'll suddenly become alturisitic or discover what ethics are?

Because I do not place all of the blame on Democrats. Republicans are just as guilty. Do you think that the Republicans care more about average Americans than the Dems do? I certainly haven't seen any indications of that.

http://www.ffiec.gov/CRA/history.htm

....consistant with safe and sound banking operations.

No where here do I see any indication of this act telling lending institutions "Go crazy and loan whatever you want regardless of whether the borrower can afford it or not."

As added information see the following.

http://www.federalreserve.gov/dcca/cra/

Nor does the law require institutions to make high-risk loans that jeopardize their safety.

Which is exactly what they did, then had to be bailed out. How do they not bear at least some of the responsibility?

Another source--http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html

You're showing your true colors scooter. So why didn't you address the post put out by OC?

Andrea Cristobal wrote:I see an awful lot of blaming everyone and everything but banks, mortgage companies, etc. for predatory lending. Some of the issue I am sure were exasperated by those things, but lending institutions were a part of the problem as well as people living beyond their means. Why do I see a tendency here to never blame big business for anything? Do you believe predatory lending exists?

http://www.responsiblelending.org Take a look under the 8 signs of predatory lending. There are many sites and articles dedicated to this subject.

Oh and Aaron. I don't jump because you say to 'Scooter'.

To say that the banks had a hand in unwise loans is to state something obvious--any economic crisis will certainly INVOLVE them.

However, AC, you have not done anything to address the very real concerns that unwise lending was encouraged by the very political party taking political advantage of the situation. You have also failed to address the very real concern that just because one race is receiving fewer loans is not necessarily itself racism, but is called that, and scared banks changed their behavior to comply.

And then, it what could only be called Machiavellian brilliance, when the loans failed, and the failed loans were disproportonately black (having been forced by Cuomo and others to occur in the first place), the cry of racist lending was again levelled due to the disproportionate number of blacks in foreclosure.

you see, anything the banks did, short of giving away money without repayment, was going to result in charges of racism, and spun in the direction of Republican hatred. If the loans were not made, there would have been investigations of racism, since they were made, and failed, there are investigations of racism.

this is a perfect example of "diversity" coming at the expense of sanity. You cannot artifically "level" the playing field and expect anything but disasters. Many bad loans were made by scared banks, encouraged by foolish national policies proferred by Frank and others, and the fruits of which are not only foreclosed homes but people all the more desperate for government to save them, the very same government that encouraged the bad loan in the first place.

Bush, meanwhile, trying to accommodate people who hate him anyway, pushes for (and gets from Congress) foolish spending, giving ground cover for Obama who comes after him.

Do you really believe Michael that it just 'involved them'? They were the ones who made the loans. It wasn't as though they had no choice as the other sources I posted clearly state. They certainly were not 'just bystanders' in the process. Just present without input or decision making authority.

Was this legislation meant to cause this problem? I would say no. A problem developed in how it was applied. Just before the crisis from the last source I posted the 'rules' were relaxed. Did that not play a part. Are you abdicating any responsibility on the part of the Republicans? Both of the government sources make it clear that unwise loaning is not expected. What were they frightened of? Being called racist. Is that reason to engage in unwise business practices Michael? I say no it isn't.

Andrea Cristobal wrote:Was this legislation meant to cause this problem? I would say no. But it did.

Thank you for admitting that both Sam and I were correct. You FINALLY posted something intelligent.

Aaron wrote:

Andrea Cristobal wrote:Was this legislation meant to cause this problem? I would say no. But it did.

Thank you for admitting that both Sam and I were correct. You FINALLY posted something intelligent.

I didn't mean the legislation itself.

Andrea Cristobal wrote:

Aaron wrote:

Andrea Cristobal wrote:Was this legislation meant to cause this problem? I would say no. But it did.

Thank you for admitting that both Sam and I were correct. You FINALLY posted something intelligent.

I didn't mean the legislation itself.

But you were right. Without the Community Reinvestment Act, demanded by liberals and signed by Jimmy Carter, none of this would have happened.

So why would you try to back off of one of the few things you've actually gotten right?

Because I don't believe that the Community Reinvestment Act is the problem. I think GREED IS THE PROBLEM. Greed on the part of consumers, and greed on the part of the financial sector. The existance of an Act meant to be helpful is not an excuse for the behavior that created the crisis. I have seen lots of 'personal responsibility' posts on here. When do we hold lending institutions accountable and when do they accept responsibility? Yes businesses are not individuals. But they are run by people.

Were there no act greed wouldn't have become an issue. Oversight is a constitutional role of government and they failed. Period. Yet you want to blame businesses. Yes, I'm sure some engaged in greedy practices but if your guberment was doing their job, it wouldn't have happened.

So because of greed we should never endeavor to craft any laws that aid people? We should always take into first account that there will be those who will take advantage and do nothing accordingly? Is that your position? Sounds like it.

I have also seen lots on here that government interference in differing issues shouldn't be. (Particularly business) So should government have to police big business? Or should they as businesses are run by individuals, know right from wrong?

Andrea,

The laws and policies put into place by Bill Clinton and his buddy Andrew Cuomo, the massive cover-up perpetrated by Franks, and Waters and Meeks & Co., were done in order to please their political base (power) and to increase the wealth of themselves, their families, and their closest friends and supporters.

Mike is dead on when he says the Democrats (Carter, Clinton, Cuomo, et al) used the race card to leverage banks into making risky loans to minorities. When you create policies reducing down payments and income, and practically eliminate income verification, you've got a recipe for disaster and that is what the 3 C's did.

Government interference in business should be very small in scope. The government should require and enforce safe work environments, labor laws, consumer safety laws, things of that nature. They should not be in the business of price control, or propping up failing businesses and they certainly shouldn't take over the financial industry, the automotive industry, and the healthcare industry. China does that. Cuba does that. The United States of America should NEVER do that.

I am going to tell you the same thing I have told many, many other people who seek the socialization of major portions of our economy. If you desire to live in a socialist state, MOVE to one. There are plenty to choose from. Americans want to remain free to make their own decisions. As a matter of fact, most of us what the freedoms that have been stolen from us over the course of the past century restored. This is a democratic republic functioning with a capitalist system and with every fiber of my being I hope it remains that way.

I know our system is flawed. I realize our society can improve. I am well aware there are changes that need to be made, but what does not need to be changed is the American way of life from one of liberty, where the innovation and dedication of countless Americans that have gone before us has created the greatest nation in recorded history to a way of life proven to breed mediocrity, stagnation, and discontent.

You claim it is greed but what about personal responsibility? What about the family that knows they can't afford a house and buys it anyway. For every loan that you want to blame on predatory lending, there has to be a home buyer who was supposedly taken advantage of. Why don't you blame them for their responsibility in this mess?

Or should we take into consideration that there are those out there too stupid to read a contract or document and understand their responsibilities in a contract THEY sign and thus the guberment has the responsibility in making decisions for idiots like that? Is that your position?

If there are loan officers and mortgage brokers out there breaking the law, lying and being misleading then by all means they should be punished but if they're within the purview of the law, then the problem is in the law as it is with the Community Investment Act.

Yet you want to blame a bank becuase you think the role of guberment is to be all things to all people. Typical liberal tripe.

The existance [sic] of an Act meant to be helpful is not an excuse for the
behavior that created the crisis. I have seen lots of 'personal
responsibility' posts on here. When do we hold lending institutions
accountable and when do they accept responsibility? Yes businesses are
not individuals. But they are run by people.

The act was not meant to be helpful it told banks to circumvent their own lending rules to satisfy government quotas. The "problem" the act was passed to rectify was the absence of lending capital in areas that might be labeled as being in "urban decay". The lending institutions had rules that precluded such loans because of their likelihood of not being repaid. This is why government does not do well regulating business.

That Barney Frank and others stymied reforms that would have re-capitalized Fannie Mae and Freddy Mac and tightened controls means that the act is exactly what exacerbated the crisis. The act enforced its provisions through rules that forebade mergers if quotas were not met.

With regard to personal responsibility, I never advocated anything less than the failure of the banks in question. Sure, fewer than ten giant bank would have come crashing down but tens of thousands of smaller community-based banks were solvent as hickory nuts. What could be more in line with "personal responsibility" than the willingness to allow the banks to fail?